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Suppose that before tax was imposed 400 million gallons of gasoline was supplied at $3.00 per...

  1. Suppose that before tax was imposed 400 million gallons of gasoline was supplied at $3.00 per gallon.
    1. What happens when government imposes a tax of 60 cents per gallon on sellers?
    2. How would such a tax affect the market for gasoline i.e. what is the new equilibrium? The ne
    3. On whom does the incidence of the tax fall more heavily?
    4. How much government revenue will be generated by the excise tax?
    5. What happens when government imposes a tax of 60 cents per gallon on buyers?
    6. How would such a tax affect the market for gasoline i.e. what is the new equilibrium?
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